Fresh produce retail sales continued to slide in August, with IFPA's monthly report using Circana data showing fruit pound sales fell 6.1% year-over-year and vegetables dropped 4.2%. The declines were broad-based, with only apples, avocados, potatoes, and peppers posting year-over-year gains across the major volume categories.

Multiple headwinds converged in August: dropping consumer confidence, lingering effects of the summer's Cyclospora outbreak, record-high fuel prices, and persistent inflation above target levels. Adding further complexity is the rapid rise of GLP-1 weight-loss medication use, now estimated at one in six Americans, which is actually reducing the volume of food consumers eat overall rather than just shifting their spending.

The piece of the story that favors fresh produce is that GLP-1 users tend to prioritize foods high in protein and fiber, where fruits and vegetables have a natural advantage. Whether that's enough to offset the broader demand headwinds is unclear, but it's a messaging angle worth monitoring for category managers thinking about how to position produce heading into fall.

Metro Inc has reached a tentative agreement with the union representing roughly 550 workers at its produce distribution center in Laval, Quebec, ending a strike that began March 30. The deal includes a 22% salary increase over five and a half years, with a 6% raise retroactive to last September and an additional 4% upon return to work. Workers vote on the agreement September 24.

The strike cost Metro an estimated $64.2 million in lost profits and direct costs in Q3 alone, contributing to an 11.3% drop in adjusted EBITDA for the quarter. The Laval facility supplies more than 350 supermarkets in Quebec, and the disruption forced the company to lean on contingency distribution support from a Toronto facility.

Even with a deal in place, unwinding contingency plans and restoring normal produce distribution could stretch into the next fiscal year. Category managers and buyers sourcing through Quebec retail channels should watch for potential service fluctuations as operations normalize.

Produce freight rates out of South Texas moved sharply higher over the past week, with rates to Boston climbing 14% to $7,600–$7,900 and Miami up 9% to $5,200–$5,500. The increases reflect continued heavy volume of Mexican imports crossing through the Rio Grande Valley, including peppers, tomatoes, limes, cucumbers, melons, and cilantro. Year-over-year comparisons are even more striking, with some lanes running 54% above 2025 levels.

California told a different story. Rates for coastal vegetables, carrots, and some desert shipments fell flat to lower week-over-week, with Kern County carrot routes to New York dropping 12% and Chicago down 10%. Citrus freight out of South and Central California held steady but remains 45–60% above year-ago levels on several key lanes. Washington's Yakima Valley and Wenatchee continued to carry the highest freight premiums of any major origin in the country.

The split between a hot South Texas market and a softening California market is worth watching for buyers planning shipments this week. Transportation costs remain substantially elevated across the board compared to a year ago, even where weekly rates are easing.

Markon inspectors are actively monitoring value-added salad products and tender leaf items after a significant multi-day heat event last week pushed temperatures 20 to 30 degrees above normal across portions of the Salinas and Santa Maria Valleys. Because value-added products undergo additional handling and processing, they are more vulnerable to quality and shelf-life issues following extreme heat than whole-head commodity items.

Current challenges include reduced yields from extra sorting and trimming, slowed production, and quality risks across the value-added category. Markon suppliers are prioritizing their best lots for Markon orders and stepping up field and processing inspections to catch defects early. The cooperative is recommending quick inventory turns on affected products.

Whole-head iceberg and romaine are currently holding up better and may offer stronger shelf-life performance as a near-term alternative. Buyers managing bagged salad and tender leaf programs should keep a close eye on incoming quality over the next week and consider adjusting order timing or shifting volume toward commodity items where possible.

Argentina harvested a record 3.76 million tons of fresh citrus in 2025, up from 3.45 million tons the year before. Lemons drove the increase, surging 29% to 2.21 million tons and putting Argentina at 22% of the global lemon harvest. Fresh citrus exports rose 18% overall to 321,046 tons, with lemons making up the bulk of those shipments.

The United States was Argentina's second-largest citrus export market and its single largest destination for lemons specifically, receiving 49,242 tons of fresh citrus in 2025 — nearly all of it lemons. California Citrus Mutual has already been meeting with trade representatives in Washington, D.C., about the impact of Argentine lemon imports on California growers and their returns.

With California's lemon acreage already under pressure and growers facing elevated production and freight costs, the continued rise of Argentine supply is a tension worth tracking. Any movement on trade policy or phytosanitary access rules related to Argentine citrus could directly affect California grower returns and U.S. lemon pricing.

Hy-Vee has shed peripheral operations including its Wahlburgers partnership and convenience store business, and is now refocusing on prepared foods, perishables, pharmacy, and health. CEO Jeremy Gosch outlined the strategy to the Des Moines Business Record, detailing an extensive remodel program underway across its stores, beginning in West Des Moines. Changes include expanded prepared food sections, updated deli and salad offerings, and freshly made items like bagels and tortillas.

On the produce side, Hy-Vee recently completed a brand evaluation of its fresh meat and produce partnerships, ending some relationships and strengthening others — including a deepened partnership with Driscoll's. The retailer is also redesigning ecommerce and pharmacy pickup to improve speed and flow, and plans to expand its small-town Midwest store format to more markets.

For produce suppliers, Hy-Vee's recommitment to fresh and perishables signals a meaningful retail partner investment that could translate into stronger produce placement and promotional activity across its Midwest footprint. The Driscoll's partnership signal in particular is worth watching for anyone competing in the berry category at Hy-Vee.

Central California is in the final stretch of its watermelon season, with quality beginning to soften as cooler evenings arrive and volumes trailing off. Prices on watermelons were low through most of August but have firmed up in recent weeks. The region typically wraps up watermelon production around 95% by October, after which the supply focus shifts to the desert region and Mexico.

Winter squash is a different story. Most Central Valley growers are actively in production through around October 4, with steady weather in the 80s supporting good quality and demand. Pricing on squash is at normal seasonal levels in the mid-to-high teens, and program business dominates the category — with limited opportunity for non-program sellers to move volume.

Buyers planning fall promotions on squash have a narrow window before Central California transitions out and supply shifts to Nogales, Arizona. Watermelon buyers should begin preparing for the sourcing transition to desert and Mexican supply in the coming weeks.